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CG 7B: Disposals or applications after earlier deductions
or “Tax implications when benefiting from previously deducted expenses”
You could also call this:

“Rules for selling or restating hidden assets after claiming tax deductions”

This law is about what happens when you have a special kind of asset that you can’t see or touch, called a non-depreciable intangible asset. If you got money back (a deduction) for doing research or development on this asset, there are some rules you need to know.

If you sell this asset and get money for it, but that money isn’t counted as income under other rules, you might have to pay some money back. The amount you pay back is usually the same as the deduction you got earlier. But if you sell it for less than the deduction you got, you only have to pay back the amount you sold it for.

If you start showing this asset in your financial reports again, you have to pay back the full amount of the deduction you got earlier.

For the rules about depreciation in subpart EE, it’s like you never got that deduction in the first place.

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Next up: CG 8: Capital contributions

or “Rules for counting capital contributions as income over 10 years”
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Part C Income
Recoveries

CG 7CDisposal or rerecognition of derecognised non-depreciable assets

  1. This section applies when, for a non-depreciable intangible asset, a person has been allowed a deduction under section DB 34 (Research or development) because section DB 34(3) applies and—

  2. the intangible asset is disposed of in an income year for consideration that is not income under another provision of this Act:
    1. the intangible asset is rerecognised for financial reporting purposes in an income year.

      1. If subsection (1)(a) applies, an amount equal to the deduction described in subsection (1) is income of the person for the income year, unless subsection (3) applies.

      2. If subsection (1)(a) applies and the consideration is less than the deduction described in subsection (1), then, despite subsection (2), an amount equal to the consideration is income of the person for the income year.

      3. If subsection (1)(b) applies, an amount equal to the deduction described in subsection (1) is income of the person for the income year.

      4. For the purposes of subpart EE (Depreciation), the person is treated as never having the deduction described in subsection (1).

      Notes
      • Section CG 7C: inserted (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on , by section 80(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).